Ben Ezra-Weinstein & Co v. America Online Inc.

• Decision Date: 14 March 2000
• Docket Number: No. 99-2068,99-2068
• Citation: 206 F.3d 980
• Parties: (10th Cir. 2000) BEN EZRA, WEINSTEIN, AND COMPANY, INC., Plaintiff-Appellant, v. AMERICA ONLINE INCORPORATED, Defendant-Appellee
• Court: U.S. Court of Appeals — Tenth Circuit

Page 980

206 F.3d 980 (10th Cir. 2000)

BEN EZRA, WEINSTEIN, AND COMPANY, INC., Plaintiff-Appellant, v. AMERICA ONLINE INCORPORATED, Defendant-Appellee.

No. 99-2068

UNITED STATES COURT OF APPEALS TENTH CIRCUIT

March 14, 2000

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO. D.C. No. CIV-97-485-LH/LFG

[Copyrighted Material Omitted] Shannon L. Donahue, P.C., Albuquerque, New Mexico (argued), (Esteban A. Aguilar of Aguilar Law Offices, P.C., Albuquerque, New Mexico; Mark A. Glenn of Moses, Dunn, Farmer & Tuthill, P.C., Albuquerque, New Mexico; Paul J. Kennedy of Pepper, Hamilton & Scheetz, LLP, Philadelphia, PA, on the brief), for Plaintiff-Appellant.

Patrick J. Carome of Wilmer, Cutler & Pickering, Washington, D.C. (John Payton, Samir Jain, Matthew Brill, of Wilmer, Cutler & Pickering, Washington, D.C.; Laura E. Jehl, of America Online, Inc., Dulles, Virginia; John G. Baugh of Eaves, Bardacke, Baugh, Kierst & Kiernan, P.A., Albuquerque, New Mexico, with him on the brief), for Defendant-Appellee.

Before BALDOCK, BRORBY, and LUCERO, Circuit Judges. BALDOCK, Circuit Judge.

Section 509 of the Communications Decency Privacy Act of 1996, Pub.L. No. 104-104, 110 Stat. 137-39 (codified at 47 U.S.C. § 230), provides in relevant part: "No provider . . . of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." 47 U.S.C. § 230(c)(1). The principal issue in this case is whether America Online acted as an information content provider outside the scope of § 230 immunity when it provided access to allegedly inaccurate information regarding Ben Ezra, Weinstein, and Company's publicly traded stock. We hold that America Online acted solely as an interactive computer service provider and therefore is immune from suit under § 230.

I.

Defendant America Online Incorporated operates a large interactive computer service, through which millions of subscribers can access various information and information services, including the Internet. Through its Quotes & Portfolios service area, Defendant publishes continuously updated stock quotation information concerning more than 40,000 publicly traded stocks and securities. The stock quotation information includes data about the market price for specific stocks and the volume of shares traded in the current or previous trading day. Two independent third parties S&P ComStock, Inc., a stock quote provider, and Townsend Analytics, Ltd., a software provider designated by ComStock jointly provide this information to Defendant. The original sources for this information are major national and international stock exchanges and stock markets, including the New York Stock Exchange, the American Stock Exchange, and the Over-the-Counter market.

Plaintiff Ben Ezra, Weinstein, and Company, an Albuquerque-based, publicly owned company, designs and manufactures corporate finance computer software. In March 1997, Plaintiff filed an action in New Mexico state court against Defendant asserting state law claims for defamation and negligence. In its complaint, Plaintiff sought both damages and injunctive relief. Plaintiff alleged that on three occasions Defendant published incorrect information concerning Plaintiff's stock price and share volume. Plaintiff claimed Defendant defamed Plaintiff by publishing the allegedly inaccurate information. Plaintiff also claimed Defendant failed to exercise reasonable care in the manipulation, alteration, and change of the stock information.

Defendant removed the action to federal court on the basis of diversity of citizenship. See 28 U.S.C. §§ 1332 & 1441. After answering Plaintiff's amended complaint, Defendant moved for summary judgment on the ground that the Communications Decency Act, 47 U.S.C. § 230, provided Defendant with immunity from Plaintiff's suit. See Fed. R. Civ. P. 56. Defendant also filed a motion to stay discovery pending resolution of its summary judgment motion. Plaintiff filed a cross-motion for summary judgment.

Plaintiff also filed a motion pursuant to Fed. R. Civ. P. 56(f) seeking authorization to conduct discovery.¹ A magistrate judge granted Plaintiff a continuance and permitted it to inquire into five factual topics relating to whether Defendant qualified for § 230 immunity.² The magistrate judge allowed Plaintiff to serve twenty-five interrogatories and take four depositions on those five topics. After conducting discovery pursuant to the magistrate judge's order, Plaintiff sought permission to conduct additional discovery. The magistrate judge denied the motion, finding that Plaintiff's request exceeded the originally authorized discovery and that Plaintiff failed to demonstrate the previously authorized depositions or written discovery were insufficient to respond to Defendant's summary judgment motion. Plaintiff appealed the magistrate judge's order to the district court. Plaintiff also moved for leave to amend its complaint to join ComStock and Townsend as defendants to its action. Finally, Plaintiff moved to stay proceedings against Defendant to allow it to take discovery from ComStock and Townsend.

The district court granted Defendant's motion for summary judgment and denied Plaintiff's cross-motion for summary judgment. The district court concluded that the undisputed evidence established Defendant never produced or created any of the allegedly inaccurate information. Consequently, the district court held that § 230 required dismissal of all Plaintiff's claims. In addition, the district court denied as moot Plaintiff's motions to stay proceedings and join additional defendants. Finally, the district court overruled Plaintiff's objection to the magistrate judge's order denying leave to take further discovery. Plaintiff appeals.

On appeal, Plaintiff argues the district court (1) erred in concluding that Defendant was immune from suit under § 230 as a matter of law, (2) abused its discretion in overruling Plaintiff's objection to the magistrate judge's order denying it leave to take additional discovery, and (3) abused its discretion in denying Plaintiff's motions to stay proceedings and for leave to amend the complaint to join additional defendants. We exercise jurisdiction pursuant to 28 U.S.C. § 1291, and affirm.

II.

Plaintiff argues Defendant is not immune from suit under 47 U.S.C. § 230 because Defendant acts as both an interactive computer service and an information content provider by participating in the creation and development of the stock quotation information. The district court, however, concluded that Defendant qualified for statutory immunity pursuant to § 230. First, the district court noted that Plaintiff did not dispute that Defendant was an "interactive computer service" as defined by § 230. Further, the district court found no evidence in the record that Defendant provided any of the stock quote information at issue. Consequently, the district court granted Defendant's motion for summary judgment.

We review the grant of summary judgment de novo, applying the same legal standard used by the district court under Fed. R. Civ. P. 56(c). United States v. Hess, 194 F.3d 1164, 1170 (10th Cir. 1999). We also review de novo the district court's interpretation of a federal statute. Id. In construing a federal statute, we "'give effect to the will of Congress, and where its will has been expressed in reasonably plain terms, that language must ordinarily be regarded as conclusive.'" Id. (quoting Negonsott v. Samuels, 507 U.S. 99, 104 (1993)).

47 U.S.C. § 230 creates a federal immunity to any state law cause of action that would hold computer service providers liable for information originating with a third party. See id. § 230(e)(3) ("No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section."). Specifically, § 230(c)(1) provides: "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." Section 230(f)(2) defines "interactive computer service" as "any information service, system, or access software provider that provides or enables computer access by multiple users to a computer service, including specifically a service or system that provides access to the Internet . . . ." Finally, § 230(f)(3) defines "information content provider" as "any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service."³

Plaintiff does not dispute that Defendant clearly fits within the definition of "interactive computer service" and that ComStock and Townsend are "information content providers" as defined by § 230(f). Plaintiff argues, however, that Defendant worked so closely with ComStock and Townsend in the creation and development of the stock quotation information that it also operated as an "information content provider." Defendant, on the other hand, claims it played no role in the creation or development of the stock quotation information.⁴

We believe Plaintiff has not demonstrated Defendant worked so closely with ComStock and Townsend regarding the allegedly inaccurate stock information that Defendant became an information content provider. While Defendant did communicate with ComStock and Townsend each time errors in the stock information came to its attention, such communications simply do not constitute the development or creation of the stock quotation information. Rather, the evidence Plaintiff presented indicated that the communications consisted of e-mails from Defendant requesting ComStock correct the allegedly inaccurate information.⁵

Plaintiff argues that Defendant deleted some stock symbols or other information from the data base in an effort to correct the errors. Plaintiff further...